Questions
Jordan Company currently is using a plant-wide factory overhead rate based on machine hours. The budgeted...

Jordan Company currently is using a plant-wide factory overhead rate based on machine hours. The budgeted factory overhead costs is $405,000. Company has two departments, X and Y. Company is considering use of departmental overhead rates for the allocation of each departments’ overhead costs to jobs. Overhead would be applied based on direct labor cost in Department X and machine-hours in Department Y. The following additional information is available:

Budgeted Amounts                           Department X           Department Y

Direct labor cost                                          $180,000                     $165,000

Factory overhead                                         $225,000                     $180,000

Machine-hours                                           51,000 mh                   40,000 mh

Actual data for Job #10                   Department X           Department Y

Direct materials requisitioned                        $10,000                      $16,000

Direct labor cost                                            $11,000                       $14,000

Machine-hours                                             5,000 mh                     3,000 mh

1. Compute total cost of manufacturing Job 10 under current system (using plant-wide rate).

2. Compute total cost of manufacturing Job 10 using departmental overhead rates.

In: Accounting

On January 1, 2019, Calvert Company issues 10%, $200,000 face value bonds for $207,259.79, a price...

On January 1, 2019, Calvert Company issues 10%, $200,000 face value bonds for $207,259.79, a price to yield 8%. The bonds mature on December 31, 2020. Interest is paid semiannually on June 30 and December 31.

Required:

1. Prepare a bond interest expense and premium amortization schedule using the straight-line method.
2. Prepare a bond interest expense and premium amortization schedule using the effective interest method.
3. Prepare the journal entries to record the interest payments on June 30, 2019, and December 31, 2019, using both methods.

In: Accounting

12. Bugs Bunny Ltd owns 92% of Road Runner Ltd. During 2019 Bugs Bunny Ltd sells...

12. Bugs Bunny Ltd owns 92% of Road Runner Ltd. During 2019 Bugs Bunny Ltd sells inventory for $470,000 to Road Runner Ltd at a mark-up of 25% above cost. At the end of the financial year 50% of the inventory was unsold. What is the work paper journal entry to eliminate the effects of the intercompany sale?

please help

In: Accounting

How do you understand and interpret mean, median, mode, standard deviation, and variance?

How do you understand and interpret mean, median, mode, standard deviation, and variance?

In: Accounting

Pig and Whistle Company, a small company following ASPE, is adjusting and correcting its books at...

Pig and Whistle Company, a small company following ASPE, is adjusting and correcting its books at the end of 2017. In reviewing its records, it compiles the following information.

a) Pig and Whistle has failed to accrue sales commissions payable at the end of each of the last two years, as follows:

Dec. 31, 2017

$6,200

Dec. 31, 2018

$3,800

B) In reviewing the December 31, 2018 inventory, Pig and Whistle discovered errors in its inventory-taking procedures that have caused inventories for the last three years to be incorrect, as follows:

Dec. 31, 2016

Understated $21,000

Dec. 31, 2017

Understated $24,000

Dec. 31, 2018

Overstated $ 9,000

Pig and Whistle has already made an entry that recognized the incorrect December 31, 2018 inventory amount.

C) In 2018, Pig and Whistle changed the depreciation method on its office equipment from double-declining-balance to straight-line because of a change in the pattern of benefits received. The equipment had an original cost of $160,000 when purchased on January 1, 2016. At that time, it was estimated that the office equipment had an eightyear useful life and no residual value. Depreciation expense recorded prior to 2018 under the double-declining- balance method was $70,000. Pig and Whistle has already recorded 2018 depreciation expense of $22,500 using the double-declining-balance method.

D) Before 2018, Pig and Whistle accounted for its income from long-term construction contracts on the completed- contract basis because it was unable to reliably measure the degree of completion or the estimated costs to complete. Early in 2018, Pig and Whistle changed to the percentage-of-completion basis for financial accounting purposes. The change was a result of experience with the project and improved ability to estimate the costs to completion and therefore the percentage complete. The completed-contract method will continue to be used for tax purposes. Income for 2018 has been recorded using the percentage-of-completion method. The following information is available:

Pre-Tax Income

Percentage-of-Completion

Completed-Contract

Prior to 2018

$195,000

$145,000

2018

75,000

30,000

Required:

1) Prepare the necessary journal entries at December 31, 2018 to record the above corrections and changes as appropriate. The books are still open for 2018. As Pig and Whistle has not yet recorded its 2018 income tax expense and payable amounts, tax effects for the current year may be ignored. Pig and Whistle’s income tax rate is 25%. Assume that Pig and Whistle applies the taxes payable method of accounting for income taxes.

In: Accounting

Hot Weelz Ltd., which began operations in January 2015, follows IFRS and is subject to a...

Hot Weelz Ltd., which began operations in January 2015, follows IFRS and is subject to a 30% income tax rate. In 2018, the following events took place:

a) The company switched from the zero-profit method to the percentage-of-completion method of accounting for its long-term construction projects. This change was a result of experience with the project and improved ability to estimate the costs to completion and therefore the percentage complete.

b) Due to a change in maintenance policy, the estimated useful life of Hot Weelz’s fleet of trucks was lengthened.

c) It was discovered that a machine with an original cost of $220,000, residual value of $30,000, and useful life of four years was expensed in error on January 23, 2017, when it was acquired. This situation was discovered after preparing the 2018 adjusting entries but before calculating income tax expense and closing the accounts. Hot Weelz uses straight-line depreciation and takes a full year of depreciation in the year of acquisition. The asset’s cost had been appropriately added to the capital cost allowance (CCA) class in 2017 before the CCA was calculated and claimed.

d) As a result of an inventory study early in 2018 after the accounts for 2017 had been closed, management decided that the weighted average cost formula would provide a more relevant presentation in the financial statements than the FIFO cost formula. In making the change to weighted average cost, Hot Weelz determined the following:

Date

Inventory—FIFO Cost

Inventory—Weighted Average Cost

Dec. 31, 2017

$ 80,000

$ 65,000

Dec. 31, 2016

115,000

85,000

Dec. 31, 2015

180,000

135,000

Required:

1. Analyze each of the four 2018 events described above. For each event, identify the type of accounting change that has occurred, and indicate whether it should be accounted for with full retrospective application, partial retrospective application, or prospective application.

2. Prepare any necessary journal entries that would be recorded in 2018 to account for events C (ignore income tax considerations) and D.

In: Accounting

Terry Smith and two of his colleagues are considering opening a law office in a large...

Terry Smith and two of his colleagues are considering opening a law office in a large metropolitan area that would make inexpensive legal services available to those who could not otherwise afford services. The intent is to provide easy access for their clients by having the office open 360 days per year, 16 hours each day from 7:00 a.m. to 11:00 p.m. The office would be staffed by a lawyer, paralegal, legal secretary, and clerk-receptionist for each of the two eight-hour shifts. In order to determine the feasibility of the project, Smith hired a marketing consultant to assist with market projections. The results of this study show that if the firm spends $1,025,000 on advertising the first year, the number of new clients expected each day will be 59. Smith and his associates believe this number is reasonable and are prepared to spend the $1,025,000 on advertising. Other pertinent information about the operation of the office follows: The only charge to each new client would be $69 for the initial consultation. All cases that warrant further legal work will be accepted on a contingency basis with the firm earning 30 percent of any favorable settlements or judgments. Smith estimates that 20 percent of new client consultations will result in favorable settlements or judgments averaging $4,900 each. It is not expected that there will be repeat clients during the first year of operations. The hourly wages of the staff are projected to be $59 for the lawyer, $49 for the paralegal, $39 for the legal secretary, and $29 for the clerk-receptionist. Fringe benefit expense will be 40 percent of the wages paid. A total of 580 hours of overtime is expected for the year; this will be divided equally between the legal secretary and the clerk-receptionist positions. Overtime will be paid at one and one-half times the regular wage, and the fringe benefit expense will apply to the full wage. Smith has located 6,000 square feet of suitable office space that rents for $65 per square foot annually. Associated expenses will be $58,500 for property insurance and $81,200 for utilities. It will be necessary for the group to purchase malpractice insurance, which is expected to cost $369,000 annually. The initial investment in the office equipment will be $129,000. This equipment has an estimated useful life of four years. The cost of office supplies has been estimated to be $10 per expected new client consultation. Required: Determine how many new clients must visit the law office being considered by Terry Smith and his colleagues in order for the venture to break even during its first year of operations. (Do not round intermediate calculations and round your final answer up to nearest whole number.) Compute the law firm’s safety margin.

In: Accounting

Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who...

Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Total Home Nursing Meals On Wheels House- keeping Revenues $ 928,000 $ 266,000 $ 404,000 $ 258,000 Variable expenses 473,000 111,000 209,000 153,000 Contribution margin 455,000 155,000 195,000 105,000 Fixed expenses: Depreciation 69,500 8,600 40,500 20,400 Liability insurance 44,300 20,800 7,800 15,700 Program administrators’ salaries 115,500 40,700 38,500 36,300 General administrative overhead* 185,600 53,200 80,800 51,600 Total fixed expenses 414,900 123,300 167,600 124,000 Net operating income (loss) $ 40,100 $ 31,700 $ 27,400 $ (19,000) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year’s net operating income of $40,100 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping program. The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided. Required: 1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? 1-b. Should the Housekeeping program be discontinued? 2-a. Prepare a properly formatted segmented income statement. 2-b. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services?

In: Accounting

ACCOUNT Work in Process—Baking Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Mar. 1...


ACCOUNT Work in Process—Baking Department ACCOUNT NO.
Date Item Debit Credit Balance
Debit Credit
Mar. 1 Bal., 4,800 units, 2/5 completed 11,232
31 Direct materials, 86,400 units 172,800 184,032
31 Direct labor 50,600 234,632
31 Factory overhead 28,456 263,088
31 Goods finished, 87,600 units 253,944 9,144
31 Bal. ? units, 3/5 completed 9,144


The following information concerns production in the Baking Department for March. All direct materials are placed in process at the beginning of production.

a. Based on the above data, determine each cost listed below. Round "cost per equivalent unit" answers to the nearest cent.

1. Direct materials cost per equivalent unit. $
2. Conversion cost per equivalent unit. $
3. Cost of the beginning work in process completed during March. $
4. Cost of units started and completed during March. $
5. Cost of the ending work in process. $

b. Assuming that the direct materials cost is the same for February and March, did the conversion cost per equivalent unit increase, decrease, or remain the same in March?

In: Accounting

What are the requirements to become CPA in Texas and in New Mexico? What are the...

What are the requirements to become CPA in Texas and in New Mexico? What are the similarities/differences between both states ( Texas and New Mexico) to become CPA?

In: Accounting

Question 4 Comparative financial statement data of Lannister Inc. are as follows: Lannister Inc. Comparative Income...

Question 4

Comparative financial statement data of Lannister Inc. are as follows:

Lannister Inc.

Comparative Income Statement

Years Ended December 31, 2016 and 2015

2016

2015

Net sales

$687,000

$595,000

Cost of goods sold

375,000

276,000

Gross profit

312,000

319,000

Operating expenses

129,000

142,000

Income from operations

183,000

177,000

Interest expense

37,000

45,000

Income before income tax

146,000

132,000

Income tax expense

36,000

51,000

Net income

$110,000

$81,000

Lannister Inc.

Comparative Balance Sheet

December 31, 2016 and 2015

2016

2015

2014

Current assets:

   Cash

$45,000

$49,000

   Current receivables, net

212,000

158,000

$200,000

   Inventories

297,000

281,000

181,000

   Prepaid expenses

4,000

29,000

      Total current assets

558,000

517,000

Property, plant and equipment, net

285,000

277,000

Total assets

$843,000

$794,000

$700,000

Accounts payable

150,000

105,000

112,000

Other current liabilities

135,000

188,000

Total current liabilities

$285,000

$293,000

Long-term liabilities

243,000

231,000

Total liabilities

528,000

524,000

Common shareholders’ equity, no par

315,000

270,000

199,000

Total liabilities and shareholders’ equity

$843,000

$794,000

Other information:

Market price of Lannister common stock: $102.17 at December 31, 2016; and $77.01 at December 31, 2015.

Common shares outstanding: 18,000 during 2016 and 17,500 during 2015.

All sales on credit.

  

Compute the following ratios for 2016 and 2015

Current ratio

Quick ratio (acid test)

Receivables turnover and days’ sales outstanding (rounded to the nearest whole day)

Inventory turnover and days inventory outstanding (rounded to the nearest whole day)

Accounts payable turnover and days’ payable outstanding (rounded to the nearest whole day).

Cash conversion cycle (in days)

Times-interest-earned ratio

Return on assets (use DuPont analysis)

Return on common shareholders’ equity (use DuPont analysis)

Earnings per share of common stock

Price/earnings ratio.

Decide whether (a) Lannister’s financial position improved or deteriorated during 2016 and (b) the investment attractiveness of Lannister’s common stock appears to have increased or decreased.

In: Accounting

What are the theories in lobbying standard setting how to apply those theories?

What are the theories in lobbying standard setting how to apply those theories?

In: Accounting

Eric, who is single with no dependents, has the following for the calendar year 2018: RECEIPTS...

Eric, who is single with no dependents, has the following for the calendar year 2018:

RECEIPTS FOR YEAR

Salary as Walmart greeter                                                              $ 16,200

Interest from Friendly Bank                                                                 2,236

Interest from City of Chula Vista                                                        2,000

Dividends from U.S. corporations                                                            69

Social Security benefits                                                                        18,000

EXPENDITURES FOR YEAR

Contribution to IRA                                                                                      920

Unreimbursed medical expense                                                            1,200

Home mortgage interest                                                                          3,400

State income and property taxes                                                          3,200

Charitable contributions of cash                                                           5,400

Tax preparation fee                                                                                       175

Eric claims two exemptions.

How much is Eric’s adjusted gross income?

Assuming your answer to “1” was $22,000, how much is Eric’s taxable income?

Based on your answer to “2”, how much is Eric’s federal income tax?

*SHOW WORK*

In: Accounting

What is the difference between refundable versus nonrefundable credits? Name two or more refundable credits. What...

What is the difference between refundable versus nonrefundable credits?

Name two or more refundable credits.

What are the Criterion of American Opportunity Credit and Lifetime Learning Credit?

In: Accounting

During 2018 and 2019, Kale Co. completed the following transactions relating to its bond issue. The...

During 2018 and 2019, Kale Co. completed the following transactions relating to its bond issue. The company’s fiscal year ends on December 31.

2018

Mar. 1 Issued $350,000 of 10 year, 6 percent bonds for $341,000. The semiannual cash payment for interest is due on March 1 and September 1, beginning September 2018.
Sept. 1 Recognized interest expense including the amortization of the discount and made the semiannual cash payment for interest.
Dec. 31 Recognized accrued interest expense including the amortization of the discount.

2019

Mar. 1 Recognized interest expense including the amortization of the discount and made the semiannual cash payment for interest.
Sept. 1 Recognized interest expense including the amortization of the discount and made the semiannual cash payment for interest.
Dec. 31 Recognized accrued interest expense including the amortization of the discount.

Required

When the bonds were issued, was the market rate of interest more or less than the stated rate of interest? If the bonds had sold at face value, what amount of cash would Kale Co. have received?

Prepare the liabilities section of the balance sheet at December 31, 2018 and 2019.

Determine the amount of interest expense Kale would report on the income statements for 2018 and 2019.

Determine the amount of interest Kale would pay to the bondholders in 2018 and 2019.

In: Accounting